Blog Post

Explosion in Cider consumption: While cider is still a relatively small category (~1% of Beer industry), it has shown explosive growth, up 92% in 2012, +77% in 2013, and +87% YTD 2014. MillerCoors’ Marketing VP, David Kroll, recently estimated that cider could reach 4% to 5% of total Beer.

Is the Cider boom tied to the gluten-free movement? This category ascent has, in our opinion, coincided with larger national attention paid to gluten in diets (cider is gluten free). Google searches for “gluten free” follows a nearly identical, slightly leading curve for cider’s growth. The gluten-free trend appears to be accelerating, with a RBC survey showing a ~8pp y/y increase in consumers beginning to purchase gluten-free products over the last six months.

Angry Orchard capitalizing, but competition accelerating: Boston Beer’s Angry Orchard, introduced in 2012, has achieved an impressive +50% share of the Cider market. We believe a key component of its success was very clear labeling indicating that, unlike beer, it is “naturally gluten free”. On a run-rate basis, Angry Orchard is >20% of Boston Beer’s sales. This trend and growth rate have not been lost on major international competitors, which have introduced/re-branded the following products: MillerCoors – Smith & Forge and Crispin; ABI – Stella Cidre; and Heineken – Strongbow. We believe the category will continue its strong growth, which should be enough for Angry Orchard continue growing even if its cedes share.